December 20, 2017

Europe maintains a healthy market but is looking forward to
fresh energy and climate ambitions to add certainty over what the post-2020
landscape will mean for new wind power.

Trade association WindEurope reports that wind
power is providing over half of all new generating capacity being
installed across the EU member states, with onshore providing the majority.

Some 4.8 GW of new onshore wind was installed in the first
half of 2017, with the sector attracting €5.4 billion (US$6.4 billion) in new
asset financing over the same period; comparable figures for the offshore
sector saw 1.3 GW installed offshore, and €2.9 billion (US$3.4
billion) in financing. WindEurope predicts 2017 will be a record year for
installations, with over 10 GW of new onshore wind (3.1 GW offshore) installed
across the EU-28.

Of note, European
wind energy broke a new daily generation record in October 2017 when
it provided 24.6 percent of the EU’s electricity demand. At the end of June
2017, the EU had around 160 GW of wind power capacity (145.5 GW onshore) and
eight states with over 5 GW installed.

Looking forward, current trends aren’t expected to alter in
the near term and deployment looks set to remain strong through to 2020.

According to its ‘Central Scenario’ to 2020, WindEurope
predicts some 37.7 GW new onshore capacity between 2017 and 2020. Averaging
12.6 GW new wind per year (9.4 GW onshore), the scenario predicts the EU-28
reaching over 200 GW of installed wind capacity, providing 16.5 percent of its
electricity needs, by 2020. That same scenario posits a total of 8.9 GW new
onshore wind capacity (3.3 GW offshore) installed through 2018.

Europe’s market is expected to remain a highly concentrated
one, however. Just three countries — Germany, the U.K. and France — account for
over 80 percent of the EU’s onshore installations, while deployment through
2018 is set to center around Germany (the market leader), the U.K., France,
Spain and the Netherlands.

WindEurope Chief Policy Officer, Pierre Tardieu, stated in
mid-2017: “We are on track for a good year in wind capacity installations but
growth is driven by a handful of markets. At least 10 EU countries have yet to
install a single MW so far this year. On onshore wind, the end of U.K.
Renewable Obligation scheme will lead to even greater market concentration in
Germany, Spain and France.”

Significant onshore tenders for 2018 include 3,200 MW from
Germany (two of which will be technology-neutral) and 1,000 MW from France.

Spain is tipped to “experience radical growth after several
years of inactivity,” and is pitched to install 4.1 GW of capacity in the coming
years.

WindEurope expects that the U.K. industry will slow its
onshore activity from 1.6 GW in 2016 to “almost none” in 2020, as result of a
government-led shift towards offshore.

States already meeting goals may slow development, others
will hasten to fulfil commitments. Others yet, already having met targets, will
continue build out unabated, motivated by longer term climate and energy goals;
Denmark and Sweden, for instance, are targeting 100 percent renewable energy by
2035 and 2040 respectively.

While current uncertainty surrounding post-2020 policy
brings opaqueness to what deployment will look like further down the line,
analyst consensus and trends both indicate that wind will maintain its dominant
share in new generating capacity.

In this matter 2018 is an important year, with European
institutions engaged in preparing new policy frameworks for the post-2020
period.